Wednesday, June 05, 2013

Who Besides ExactTarget's Executives And Directors Wins In Buyout Deal?

ExactTarget has become one of the largest employers in downtown Indianapolis, growing to more than 1,000 employees since the company's founding in 2000. So yesterday's news that it has been acquired by San Francisco-based for $2.5 billion creates some cause for concern about the company's future in Indianapolis.

The company has had a lot of help from taxpayers along the way with its phenomenal grown through sate and local economic development incentives worth tens of millions of dollars, including personal and real property tax abatements on several downtown properties which houses the company's employees. The latest tax benefits were just approved in April by the Indianapolis City-County-Council. Councilor Brian Mahern spoke out against the generous public support for the company that other councilors outspokenly defended, noting the company's commitment to remaining in Indianapolis. Now all bets are off.

The Star's John Russell reports that the buyout will net a huge payoff to the company's top officers and directors. Although ExactTarget has never made a dime in its existence, racking up losses of tens of million annually, those 13 executives and directors will be $640 million richer thanks to the buyout. ExactTarget's CEO Scott Dorsey will receive $70.5 million for his 3% share of the company's shares.

Dorsey was in San Francisco for yesterday's announcement. In an interview, he offered no assurances about the company's future in Indianapolis. “It’s very early," Dorsey said in an interview Tuesday morning shortly after the deal was announced. “I’m not in a position to talk too much about the future.”

This is one of those occasions when I wished we had a lot more public reporting requirements for our elected officials. I have a hunch that there are some state and local officials who are much wealthier today as a result of this buyout, who have been very generous with taxpayer support of ExactTarget, but because public reporting requirement for those officials is totally useless, we'll never know how those public officials benefited from their support of generous public subsidies for the company.

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